Here are simplified financial statements for Phone Corporation in a recent year: INCOME STATEMENT (Figures in $ millions) Net sales $ 14,000 Cost of goods sold 4,510 Other expenses 4,212 Depreciation 2,788 Earnings before interest and taxes (EBIT) $ 2,490 Interest expense 730 Income before tax $ 1,760 Taxes (at 30%) 528 Net income $ 1,232 Dividends $ 946 BALANCE SHEET (Figures in $ millions) End of Year Start of Year Assets Cash and marketable securities $ 98 $ 167 Receivables 2,832 2,670 Inventories 232 283 Other current assets 912 977 Total current assets $ 4,074 $ 4,097 Net property, plant, and equipment 20,063 20,005 Other long-term assets 4,306 3,860 Total assets $ 28,443 $ 27,962 Liabilities and shareholders’ equity Payables $ 2,654 $ 3,130 Short-term debt 1,464 1,618 Other current liabilities 856 832 Total current liabilities $ 4,974 $ 5,580 Long-term debt and leases 4,777 5,222 Other long-term liabilities 6,268 6,239 Shareholders’ equity 12,424 10,921 Total liabilities and shareholders’ equity $ 28,443 $ 27,962 Calculate the following financial ratios for Phone Corporation: (Use 365 days in a year. Do not round intermediate calculations. Round your final answers to 2 decimal places.) 1) return on equity (use average balance sheet) 2) return on assetes (use average balance sheet) 3) return on capital
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